Bill Frezza is a 35-year veteran of the technology industry. After graduating from MIT with degrees in both science and engineering, Bill spent his early years at Bell Laboratories. Since then, he has worked as a product manager, salesman, marketer, entrepreneur, consultant, technology evangelist, and venture capitalist. Bill holds seven patents and has been investing in early-stage tech startups for the last 17 years as a partner in a venture capital firm. Since 2008, he has been writing weekly opinion columns for publications such as RealClearMarkets.com, Forbes.com, the Huffington Post and Bio-IT World and appeared regularly on TV and radio outlets, including CNBC, Fox Business and WBAL. In 2011, he was a finalist for the Hoiles Prize for excellence in American journalism and in October 2013, he became the Competitive Enterprise Institute’s 2013-2014 Warren T. Brookes Journalism Fellow. In January 2014, Bill began hosting RealClear Radio Hour airing Saturdays on Boston’s WXKS 1200AM & WJMN 94.5FM-HD2.

Governor Walker's Victory Spells Doom For Public Sector Unions

Public sector unions have reached their high water mark. Let the cleanup begin as the red ink recedes.

Despite a last-minute smear campaign accusing Scott Walker of fathering an illegitimate love child, the governor’s recall election victory sends a clear message that should resonate around the nation: The fiscal cancer devouring state budgets has a cure, and he has found it. The costly defeat for the entrenched union interests that tried to oust Walker in retribution for challenging their power was marked by President Obama’s refusal to lend his weight to the campaign for fear of being stained by defeat. We’ll see how well this strategy of opportunistic detachment serves in the fall as Obama reaches out to unions for support.

This fight is not without precedent. Progressive patron saint Franklin Delano Roosevelt—who more than any other president set our country on a course away from the founding principles of limited government—knew that public sector unions would be the death of the social welfare state he worked so hard to create. Hence, he consistently opposed allowing government employees to unionize. Today, Greece sets the example of what happens when public sector unions gain the upper hand.

In 1959 Wisconsin became the first state to allow collective bargaining by government employees. The projected cost of supporting Baby Boomer union retirees now threatens to bankrupt the state, as it does many others. Scott Walker ran for office promising change. The fiscal medicine he is administering may be bitter, but it looks like it is starting to work. The state budget has been balanced. The unemployment rate has been dropping and is now below the national average. Property taxes are down. Fraudulent sick leave policies—which allowed employees to call in sick and then work the next shift for overtime pay—have been ended. The government has stopped forcibly collecting union dues from workers’ paychecks.

Best of all, the myth that union bosses represent their members’ interests has been exposed as a lie. Now that union dues are voluntary, tens of thousands of union members have stopped paying them. Membership in the Wisconsin chapter of the American Federation of State, County and Municipal Employees union (AFSCME) has dropped by half. Membership in the state’s American Federation of Teachers (AFT) is down by over a third. Given unions’ influential role in most elections, the national implications of this trend are staggering.

Walker’s message is clear: The key to bringing balance back to public sector labor relations and balance state budgets is to break the iron triangle of closed-shop mandatory unionization, compulsory dues collection, and oversized campaign donations to politicians that promise to do the unions’ bidding. If other governors take his cue and take up the cause, that giant sucking sound you hear will be the air coming out of union bosses’ bloated political action budgets.

The work in Wisconsin is not complete. The controversial law exempted police and firefighters, a political concession to get the legislation passed. Federal courts have zeroed in on this anomaly, striking down certain sections of the law because they do not treat workers equally. This needs to be repaired— by rescinding the exemption for public safety workers. With the recall election behind him, Walker may be sufficiently emboldened to do just that.

The power of private sector unions was long ago broken by many heavily unionized companies going bankrupt. While this was painful for both workers and shareholders, the economy motored on as nimbler non-union competitors picked up the slack. This approach is problematic for the public sector because bankrupt state and local governments cannot be replaced by competitors waiting in the wings. Yes, citizens can always vote with their feet, emptying out cities like Detroit, leaving the blighted wreckage behind. But isn’t Walker’s targeted fiscal retrenchment less painful than scorched-earth abandonment?

Chicago machine candidate Barack Obama rode into office to the tune of Hail to the Chief, promising the unions that backed him the gift of card check elections, ending the secret ballot that shields employees from union intimidation. He may well ride into retirement to the tune of On Wisconsin as the era of closed shop unionism comes to an end.

Bill Frezza is a Boston-based writer and venture capitalist. You can find all of his columns, TV, and radio interviews here. If you would like to have his columns delivered to you by email, click here or follow him on Twitter @BillFrezza.

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Politically powerful public unions are rather new to the American experience. They did not exist previous to 1958 and 1962 respectfully. Will the Democrats now be second class power brokers? Can they even provide decent competition to Republicans in the purple and red state areas of the nation? Well, we will find out soon enough.

Why is it so hard to understand that cuts have to made? Sacrifices need to be made by everyone. Entitlement mentality is killing this nation. Public sector employees are living off of our tax dollars. They are not entitled to our money or more benefits than those paying their salaries. It’s not the gov’t's job collect union dues or force people to join the unions. How is it that Unions own their own insurance companies?? I just got my refund check from GEICO. I had no ides it was the insurance company of the Gov’t Employees Insurance Company. I will never buy their insurance again. NO WAY. I love how the unions are exempted from Obama Care, I am sure their Ins. companies are too. Nice of the MSM to enlighten the public of this.

CONGRATULATIONS WISCONSIN! You will see the benefits of lower unemployment, expansion of the private sector and more small and large businesses LEAVING California and New York and locating there. You may not have the best weather in the United States, but it is AMAZING what PRIVATE SECTOR TAXPAYERS will ignore when they see the benefits of an area that rewards their hard work! Kudos to you. My company is looking to leave Oregon. We’re going to take a look at Wisconsin.

I certainly would like to see a sequel of this movie in my home state of CA, but I am not holding my breath. Gov Moonbeam and the Dems who have been running this state for over 40 years would rather see the state go bankrupt rather than reducing any union perk.

EnThis election is so right. Why!!! Let us be real. This is not the 60s wher3 public sector was under paid while the private sector was humming.Today the public employees are making a very competitive salary with benefits out of this world. They need to chose. It is hard to rationalize a teacher making the amount of money when in fact the college courses are one step above basket weaving 101. You must like kids period. If not you will not be a good teacher. I am so glad that Walker won. It is a step for the people who pay the salaries and benefits of public employees, One thing they must remember is that when the economy is hurting they should also feel the pain. After all they are there to serve the public

I used to only believe in the Devil as dumocrats must come from somewhere. Now, I am even entertaining the idea of a God. It’s hard to believe the people were smart enough to recognize that unions are just the mobs ‘legitimate’ business.